KHULA ENTERPRISE FINANCE LTD

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KHULA ENTERPRISE FINANCE LTD BUSINESS PLAN
FINANCIAL YEAR 2005/06
Division Operations Business Unit
LREF Responsible Manager George Mothoa
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LREF Business Plan 2005/06
Black Male White - Female
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LREF Business Plan 2005/06
Targets/ Outputs Activities Necessary to achieve targeted output Inputs/ Resources Required Key Performance Indicators Time Frame and Quarterly milestones
Achieve an even provincial spread. Special emphasis is to increase the LREF investments in the following under-serviced provinces Free State Northern Cape North West Mpumalanga Limpopo Eastern Cape Aggressive LREF Marketing and creating awareness in the target provinces. Development and management of a closer relationship with the different channels with special attention to Banks DFIs PDCs Private Sector Organisations Selected National and Provincial departments Parastatals GM MD Loan applications from the targeted provinces 1st Quarter 1 project FS 1 project NC 2 projects from any of (LMP, MP, EC, NW, GP) Total 4 projects 2nd Quarter 1 project FS 1 project NC 2 projects from any of (LMP, MP, EC, NW, GP) Total 4 projects 3rd Quarter 1 project FS 1 project NC 1 project from any of (LMP, MP, EC, NW, GP)
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LREF Business Plan 2005/06
Targets/ Outputs Activities Necessary to achieve targeted output Inputs/ Resources Required Key Performance Indicators Time Frame and Quarterly milestones
Continued Situation Dec04 52 WC Forecast Mar 05 45 WC Target Mar 06 40 WC Identify, align and keep the LREF abreast with provincial economic development initiatives Consider an interest rate discount (short term) incentive for projects coming from the under-serviced provinces Engage the DLA Provincial office as well as the Provincial Directors Closely engage Provincial Tourism and Parks Boards LREF Management Committee Approval Intervention and involvement by the DLA and Agric National Offices DEAT National Offices Timely response to respective provincial economic development initiatives Approval by the LREF Management Committee Buy-in by provincial DLA and DOA offices Buy-in by provincial DEAT offices Ongoing 1st quarter Ongoing Ongoing
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LREF Business Plan 2005/06
Targets/ Outputs Activities Necessary to achieve targeted output Inputs/ Resources Required Key Performance Indicators Time Frame and Quarterly milestones
2. Achieve a balanced Portfolio mix Portfolio mix Mortgage Dec 04 33 Forecast Mar 05 36 Target Mar 06 46 Incentivise the channel partners that deliver Mortgage loan applications with a short term (1 year) interest rate discount. GM Operations LREF Management Committee Approval and putting the strategy in operation End of 1st quarter 38 End of 2nd quarter 40 End of 3rd Quarter 42 End of 4th quarter 46
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LREF Business Plan 2005/06
Targets/ Outputs Activities Necessary to achieve targeted output Inputs/ Resources Required Key Performance Indicators Time Frame and Quarterly milestones
3. Source new funding Required fund gt R50m Sustainable annual disbursement of R49m till 2015 Market the LREF to current and prospective funders. DOA DWAF DEAT DLA Khula Hands-on Stakeholder Relations Management GM MD CFO Additional funding by new funders (and refinancing by current funders) The facility will be marketed continually Milestones R25m 1st quarter R25m 2nd quarter
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LREF Business Plan 2005/06
Targets/ Outputs Activities Necessary to achieve targeted output Inputs/ Resources Required Key Performance Indicators Time Frame and Quarterly milestones
4. Programme Sustainability Review and revise the Facilitys Pricing Structure. Possible areas to consider A different pricing structure for each product A broader pricing continuum More discount incentive for the Mortgage loan Introduction of fees Develop and maintain a provisions policy for LREF. LREF Management Committee approval LREF Management Committee Finance An approval pricing structure for each product Approval by LREF Management Committee Approval by LREF Management Committee Approval by LREF Management Committee 1st quarter End of 1st quarter
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LREF Business Plan 2005/06
Targets/ Outputs Activities Necessary to achieve targeted output Inputs/ Resources Required Key Performance Indicators Time Frame and Quarterly milestones
5. Sustainability of LREF funded projects Broaden the LREF product and service offering with the addition of a production loan finance product. Hands-on approach in projects capacity building. Hands-on and pro- active engagement with relevant SETAS. Develop a better understanding of the target market (end- user) in order to enable our channel partners to do effective lending. Intelligence information from other organisations offering a similar product / service. PAETA Thuso Mentorship SEDA THETA Marketing provincial DLA, DEAT and Agric Ability to address the farmers production inputs and other movable asset finance needs. Effective training develop capacity of the beneficiaries at the project level Ability of our channel partners to understand finance our target market. Complete production input finance product at end of 1st quarter 4 projects - 1st quarter 4 projects - 2nd quarter 4 projects - 3rd quarter Review of progress in all 12 projects 4th quarter
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• Notes to the income statement / budget
• Remuneration expense 15 of annual payroll
• Consultation fee Allocation for the payment of
  service providers ( training) on LERF funded
  projects ( at least 10 projects to start with
  training)
• Cell phone allowance Allowance for 3 staff
  members (Manager, Accounts Executive and Monitor)
• Agency fee Amount DLA pays Khula for the
  administration of the LREF at 3 of initial
  capitalisation
• March 07 and March 8 budgets are an escalation
  of 5 from March 06
• March 05 forecast figures Actual at 31 Dec04
  x 12 months
• 9 months
• March 06 budget March 05 forecast x current
  inflation ( 5 ) except for remuneration expense
  which is 25 of departmental annual payroll.

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• Notes to the income statement / budget
• Remuneration expense 15 of annual payroll
• Consultation fee Allocation for the payment of
  service providers ( training) on LERF funded
  projects ( at least 10 projects to start with
  training)
• Cell phone allowance Allowance for 3 staff
  members (Manager, Accounts Executive and Monitor)
• Agency fee Amount DLA pays Khula for the
  administration of the LREF at 3 of initial
  capitalisation
• March 07 and March 8 budgets are an escalation
  of 5 from March 06
• March 05 forecast figures Actual at 31 Dec04
  x 12 months
• 9 months
• March 06 budget March 05 forecast x current
  inflation ( 5 ) except for remuneration expense
  which is 25 of departmental annual payroll.

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